One of the big doubts that plagued Bitcoin until 2018 was whether the cryptocurrency could support mass adoption. These concerns stemmed from the low scalability of the original Blockchain digital currency network. Thus, the future of Bitcoin was hazy, and the possibility of mass adoption became a pipe dream.
It was in this scenario that the life-saving Lightning Network, a network that solves Bitcoin’s core problems, emerged. The scalability of the most important cryptocurrency is so low that it can barely process less than 7 transactions per second. Compared to VISA, the difference is obvious. The credit and debit card company is capable of processing up to 50,000 transactions per second, although it currently processes about 2,000 transactions.
This low scalability of the original bitcoin chain makes it uncompetitive to replace traditional money. In addition, during high traffic times, the network collapses, resulting in higher transaction completion fees. This weakness in the current limited use of the currency foreshadows the hurdles that could arise with massive usability.
Why is the future of Bitcoin tied to the Lightning Network?
You can imagine a future scenario in which bitcoin is legal tender in most countries and has its own home network. In this hypothetical scenario, people will ditch cryptocurrency as an option due to the high commission costs. As a result, the price would fall and the coin’s existence could be seen as doomed.
In this sense, everyone can see from their own experience how inexpedient it is to use BTC for micropayments. When the price of a currency is in a period of high volatility, the network collapses due to the number of transactions in the queue. With the increase in commissions it generates, paying for coffee or a bus ticket is really bad.
So, if the growing trend of using Bitcoin continues, the introduction of additional technologies that will make your network more efficient will be imperative. This is what the Lightning Network developers thought about. Without using this protocol, one cannot even think about the future of Bitcoin, let alone its implementation in countries with a high population density.
It is no coincidence that the number of Bitcoin nodes in LN has skyrocketed in recent months. In addition, the volume of currencies traded using this option continues to increase significantly. This indicates that a transition from the original network to this protocol is expected. This is a trend that will continue and guarantee the continuity of the cryptocurrency.
This improves the usability of LN.
If you want to get a clear understanding of the benefits that LN offers for bitcoin, you need to analyze the specifics of this network upgrade. Here are some of the advantages that Lightning offers over the qualities of the original Bitcoin Blockchain:
Instant payments: The speed of payments on the Bitcoin network is entering an unknown phase. Indeed, you no longer need to wait for popular confirmations from minors.Safety: While the Bitcoin Blockchain network presents no security concerns, LN does add several improvements, one of which stands out for the creation of smart contracts.Scalability improvements: With 7 or less transactions per second on the network, a bitcoin blockchain with LN can be processed in tens of thousands in the same amount of time.Reduced transaction fees: The absence of bottlenecks and the need for confirmations lead to a decrease in commissions to a level close to zero.Strong tendency to use the Lightning Network
As already pointed out, the future of Bitcoin and its mass use depends on the migration of its users to the Lightning Network. So how long will this process take? The answer to this question is simple. The process unfolds as the innovative cryptocurrency is introduced.
In other words, the more popular Bitcoin is, the more people will want to use it. In this sense, these people will force to relieve the entire network to some extent. As a result, LN proliferation grows in direct proportion to the growth in bitcoin usage.
According to the latest data from the network, the number of Bitcoin nodes in LN has doubled in less than a quarter. The last time the number of nodes doubled in less than a year. In April, the number of nodes in LN was approximately 10,000. Today their number exceeds 22,000.
In turn, the blocked volume increased by 20% over the month. From 1158, the volume increased to 1821 BTC. The growth in the scale of migration to this network is only at an early stage. This means that a growing trend predicts a larger role for the Lightning Network in the mainstream and future of Bitcoin.
The Lightning Network is becoming a key element of the future of Bitcoin and its immense ease of use. The number of nodes and payment channels has grown significantly in recent months. Source: explorer.acinq.co
The scalability problem
Scalability is one of the most acute Achilles heels in cryptocurrencies. Experts assure that it does not work in isolation, but is closely related to the security and decentralization of the blockchain.
Simply put, it is difficult to move one of these three functions without affecting the other two. This is a big problem, for example with Ethereum, which they intend to fix with version 2.0 of their network. Today, despite all the updates to this blockchain, scalability is poor.
Bitcoin has a sealed blockchain network and it is difficult to change any of these factors, so its future depends on external events.
This is a difficult dilemma for developers to solve. For example, security-focused managers of decentralized projects may be forced to sacrifice these two factors to improve scalability. On the contrary, they must maintain low transaction quality in order to stay away from centralized organizations.
LN, as its whitepaper explains, perfectly addresses all of these factors as it is external to the Bitcoin blockchain.
Lightning Network Overview
As is natural in any process of technological development, there are those who disagree with the novelty in whole or in part. Much of this criticism of the network focuses on potential disruptions that could jeopardize it as the savior of Bitcoin’s future.
One of these concerns is security. LN transactions are not transferred in blocks of the Bitcoin network. They are produced externally and then incorporated into the main chain. According to some analysts, this is a psychological flaw.
The strength of tradition plays an important role because many people find it uncomfortable to wear “second layers”. Admittedly, the second tier is always less secure than the original blockchain. Note, however, that LN is for micropayments. Hence, a very well-designed attack to intercept a $ 30 transaction paid for a box of chocolates makes no sense.